TSMC Reportedly to Acquire Another LCD fab to Meet Soaring AI-Driven CoWoS Demand
Taiwan media Money DJ cited industry insiders saying that Taiwan Semiconductor Manufacturing Company (TSMC) will soon finalize another purchase — an old Innolux facility in the Southern Taiwan Science Park (STSP) — to meet the surging demand for its CoWoS (Chip-on-Wafer-on-Substrate) packaging technology, driven largely by the AI boom.
In August 2024, TSMC announced the acquisition of Innolux’s Tainan Plant 4 (a 5.5-generation factory), stirring significant market speculation.
According to estimates, the newly acquired plant could begin production as early as 2026, with CoWoS capacity projected to reach 150,000 to 160,000 wafers per month by that time, marking a third consecutive year of doubling capacity.
The report said TSMC had favored Innolux’s Plant 6 in the Shugu Industrial Park initially, as its 6th-generation production line aligned well with TSMC’s advanced packaging roadmap. However, complications with the plant’s ownership — part of which still belongs to Chi Mei Corporation — made the transaction more complex. Given that TSMC already owns Innolux’s Tainan Plant 4, and that Plants 3 and 5 are geographically close and have simpler ownership structures, the newly acquired facility is likely to be either Plant 3 or Plant 5.
The demand for CoWoS from top-tier customers like Nvidia, AMD, Apple, Broadcom, and Marvell is so high that the purchased facility is expected to contribute to production by late 2025. With the addition of this plant, TSMC’s CoWoS monthly capacity could hit 70,000 to 80,000 wafers by the end of 2025, factoring in output from its outsourcing partners.
After purchasing Innolux’s Tainan Plant 4, TSMC took only 6 to 9 months to transition the facility to mass production. If TSMC proceeds with the purchase of another plant, production could begin as early as 2026.
According to rough estimates, TSMC’s CoWoS capacity could reach 150,000 to 160,000 wafers per month by 2026, marking three consecutive years of doubling output. This not only reflects strong demand from major customers but also underscores TSMC’s leadership in advanced packaging. Meanwhile, SoIC production capacity is expected to double by the end of 2024 to 4,000 to 5,000 wafers per month. By 2025, that figure could exceed 8,000 wafers per month, with another doubling anticipated in 2026.
TSMC currently counts four major customers for its SoIC technology, with AMD being the first to adopt SoIC for its MI300, which uses a combination of SoIC and CoWoS. Industry sources report that Apple, TSMC’s largest customer, has also entered the trial production phase for SoIC, with mass production expected by late 2025 for its latest M-series chips. TSMC is also collaborating with Nvidia and Broadcom, particularly in response to trends in silicon photonics and co-packaged optics (CPO). As CoWoS demand continues to rise, SoIC is expected to become TSMC’s next major growth driver in advanced packaging.